[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 626 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                 S. 626

   To amend the Internal Revenue Code of 1986 to repeal the shipping 
investment withdrawal rules in section 955 and to provide an incentive 
      to reinvest foreign shipping earnings in the United States.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 17, 2011

  Ms. Cantwell (for herself, Mr. Vitter, Mr. Carper, Mr. Cochran, Mr. 
 Inouye, Ms. Landrieu, and Mrs. Murray) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to repeal the shipping 
investment withdrawal rules in section 955 and to provide an incentive 
      to reinvest foreign shipping earnings in the United States.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Shipping Reinvestment Act 
of 2011''.

SEC. 2. REPEAL OF QUALIFIED SHIPPING INVESTMENT WITHDRAWAL RULES.

    (a) In General.--Section 955 of the Internal Revenue Code of 1986 
(relating to withdrawal of previously excluded subpart F income from 
qualified investment) is hereby repealed.
    (b) Conforming Amendments.--
            (1) Section 951(a)(1)(A) of the Internal Revenue Code of 
        1986 is amended by adding ``and'' at the end of clause (i) and 
        by striking clause (iii).
            (2) Section 951(a)(1)(A)(ii) of such Code is amended by 
        striking ``, and'' at the end and inserting ``, except that in 
        applying this clause amounts invested in less developed country 
        corporations described in section 955(c)(2) (as so in effect) 
        shall not be treated as investments in less developed 
        countries.''.
            (3) Section 951(a)(3) of such Code (relating to the 
        limitation on pro rata share of previously excluded subpart F 
        income withdrawn from investment) is hereby repealed.
            (4) Section 964(b) of such Code is amended by striking ``, 
        955,''.
            (5) The table of sections for subpart F of part III of 
        subchapter N of chapter 1 of such Code is amended by striking 
        the item relating to section 955.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years of controlled foreign corporations ending on or 
after the date of the enactment of this Act, and to taxable years of 
United States shareholders in which or with which such taxable years of 
controlled foreign corporations end.

SEC. 3. ONE-TIME TEMPORARY DIVIDENDS RECEIVED DEDUCTION FOR PREVIOUSLY 
              UNTAXED FOREIGN BASE COMPANY SHIPPING INCOME.

    (a) In General.--In the case of a corporation which is a United 
States shareholder and for which an election under this section is made 
for the taxable year, for purposes of the Internal Revenue Code of 
1986, there shall be allowed as a deduction in computing taxable income 
under section 63 of such Code an amount equal to 85 percent of the cash 
distributions which are received during such taxable year by such 
shareholder from controlled foreign corporations to the extent that the 
distributions are attributable to income--
            (1) which was derived by the controlled foreign corporation 
        in taxable years beginning before January 1, 2005, and
            (2) which would, without regard to the year earned, be 
        described in section 954(f) of such Code (as in effect before 
        the enactment of the American Jobs Creation Act of 2004).
    (b) Indirect Dividends.--A rule similar to the rule of section 
965(a)(2) of the Internal Revenue Code of 1986 shall apply, determined 
by treating cash distributions which are so attributable as cash 
dividends.
    (c) Limitation.--The amount of dividends taken into account under 
this section shall not exceed the amount permitted to be taken into 
account under paragraphs (1), (3) (determined by substituting 
``December 31, 2008'' for ``October 3, 2004''), and (4) of section 
965(b) of the Internal Revenue Code of 1986, determined as if such 
paragraphs applied to this section.
    (d) Taxpayer Election and Designation.--For purposes of subsection 
(a), a taxpayer may, on its return for the taxable year to which this 
section applies--
            (1) elect to apply paragraph (3) of section 959(c) of the 
        Internal Revenue Code of 1986 before paragraphs (1) and (2) 
        thereof, and
            (2) designate the extent, if any, to which a cash 
        distribution reduces a controlled foreign corporation's 
        earnings and profits attributable to--
                    (A) foreign base company shipping income 
                (determined under section 954(f) of the Internal 
                Revenue Code of 1986 as in effect before the enactment 
                of the American Jobs Creation Act of 2004), or
                    (B) other earnings and profits.
    (e) Election.--
            (1) In general.--The taxpayer may elect to apply this 
        section to--
                    (A) the taxpayer's last taxable year which begins 
                before the date of the enactment of this Act, or
                    (B) the taxpayer's first taxable year which begins 
                during the 1-year period beginning on such date.
            (2) Timing of election and one-time election.--Such 
        election may be made for a taxable year--
                    (A) only if made on or before the due date 
                (including extensions) for filing the return of tax for 
                such taxable year, and
                    (B) only if no election has been made under this 
                section or section 965 of the Internal Revenue Code of 
                1986 with respect to the same distribution for any 
                other taxable year of the taxpayer.
    (f) Reduction in Benefits for Failure To Maintain Employment 
Levels.--
            (1) In general.--If, during the period consisting of the 
        calendar month in which the taxpayer first receives a 
        distribution described in subsection (a) and the succeeding 23 
        calendar months, the taxpayer does not maintain an average 
        employment level at least equal to the taxpayer's prior average 
        employment, an additional amount equal to $25,000 multiplied by 
        the number of employees by which the taxpayer's average 
        employment level during such period falls below the prior 
        average employment (but not exceeding the aggregate amount 
        allowed as a deduction pursuant to subsection (a)) shall be 
        taken into account as income by the taxpayer during the taxable 
        year that includes the final day of such period.
            (2) Prior average employment.--For purposes of this 
        paragraph, the taxpayer's ``prior average employment'' shall be 
        the average number of full time equivalent employees of the 
        taxpayer during the period consisting of the 24 calendar months 
        immediately preceding the calendar month in which the taxpayer 
        first receives a distribution described in subsection (a).
            (3) Aggregation rules.--In determining the taxpayer's 
        average employment level and prior average employment, all 
        domestic members of a controlled group (as defined in section 
        264(e)(5)(B) of the Internal Revenue Code of 1986) shall be 
        treated as a single taxpayer.
    (g) Special Rules.--Rules similar to the rules of subsections (d) 
and (e) and paragraphs (3), (4), and (5) of subsection (c) of section 
965 of the Internal Revenue Code of 1986 shall apply for purposes of 
this section.
    (h) Effective Date.--This section shall apply to taxable years 
ending on or after the date of the enactment of this Act.
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